A Facebook friend of mine recently posted: "I love you, Iron Dome, and I want to have your babies."

Such is the outpouring of love and appreciation for an extraordinary piece of Israeli technology that has saved many lives in southern and central Israel.

Nevertheless, despite this appreciation, there has been little analysis of the true strategic significance of Iron Dome.

Iron Dome is a game-changer that not only consigns Hamas' and Hezbollah's current terror model to the trash can, it completely undermines the military doctrines of all of Israel's enemies.

Before we discuss this fundamental strategic shift in detail, it is necessary to address a number of important misconceptions that are clouding this reality.

Firstly, Iron Dome is no longer just a short-range missile defense system. The fifth Iron Dome battery, deployed months early just outside Tel Aviv on Saturday, features a significantly improved radar system (by Elta, an unsung hero of the Iron Dome story) and software upgrades that turn this system into a short- and medium-range missile defense system.

While Iron Dome is regularly described as being able to hit rockets with up to a 70 km. range, according to the IDF this new upgrade allows it to intercept Fajr 5 (range 75 km.) and ZelZal (range 200 km.) missiles. Thus, the defense system is already achieving a significant part of what Israel's forthcoming mediumrange missile defense system, David's Sling, is intended to achieve.

Secondly, Iron Dome's Tamir interceptors don't really cost $40,000 to $50,000 each to manufacture. Like any high technology system, the vast majority of the costs of Iron Dome are systems development and manufacturing setup.

These fixed costs are spread over the number of items estimated to be manufactured and priced accordingly. However, if the number of items produced substantially exceeds the initial estimate, costs drop proportionately.

The actual marginal cost of production of a Tamir interceptor is low and reflects the costs of the basic raw materials; metal, fuel, explosives and electronic components used in its manufacture, and the labor required to run the assembly line. If the IDF ends up ordering 10 times as many interceptors as originally estimated, then their "cost" will likely drop to around $5,000. At 100 times as many the "cost" will approach the marginal cost of less than $1000.

Thirdly, the real cost of the rockets and missiles which Iron Dome intercepts is vastly underestimated by most commentators. Grad rockets may well cost Iran only $1,000 each on the open market, but this is not the delivered cost to Hamas in Gaza.

The supply line from Iran to Gaza is an extremely convoluted and expensive one which involves huge losses from IAF action bombing convoys and factories in Sudan, and interception by western navies. Large bribes have to be paid at every step of the way, particularly to the Beduin in Sinai and the Egyptian soldiers in Rafah who are supposed to be stopping the smuggling.

And the losses continue once the Grad gets to Gaza, with the IDF regularly destroying rocket caches. Thus, 1,000 Grads, which cost Iran $1 million to purchase, may end up as 300 Grads which cost a further $2 million in "delivery charges." This turns a $1,000 Grad rocket in Iran into a $10,000 Grad rocket in Gaza.

Fourthly, Iron Dome is fundamentally a highly advanced computer system with a very rapid upgrade cycle. So far Iron Dome is matching pace with the iPhone for major software and hardware upgrades, and consequent performance increases.